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Faxed Contracts

As has been pointed out, the law on what the legal requirement for creation
of an enforceable contract  may vary  from state to state and country to
country.  In the past, the absence of a signed original agreement could
very well have been the basis for a claim that a valid contract never
existed.  More recently, however, courts have come to accept facsimile
documents in place of originals, and some courts have even permitted filing
facsimiles as official court documents.  However, I am sure that in those
jurisdictions, the rule would require the sending of an original signed
document also.  

Even if a court were to find that a contract did not exist because of the
lack of a valid signature, that does not necessarily end the matter,
however.  There are other legal and equitable doctrines that could
nevertheless come into play to protect the party who relied to its
detriment on the faxed document and the course of dealing.  

As a practical matter, the issue will rarely have any significance, unless,
of course, you
ever find yourself in a litigation over a contract.  Then you can be sure
that lawyers will try to take advantage of anything they can.  So, while my
guess is that in most cases, in most jurisidictions with a well-developed
commercial practice, faxed, signed agreements are enforceable, as has been
been stated several times here, the best advice is to consider a faxed
agreement enforceable, but to arrange to have original signed copies just
in case.  I know this is a pain, but until the law catches up with
practice, it is a wise precaution.

One way that might work to get around this problem is to include a clause
in the contract  that says that no party will challenge the validity of a
signed faxed copy on the basis of the lack of an original signature.  This
is free advice, so take it for what it is worth.

The issue will come up again as people and businesses use email and
electronic transfer of information more and more to conduct business.  Then
the issue will be whether a so-called digital signiture is valid.  

As to the lag time between receiving the fax and the signed original, the
issue really is the same.  If a jurisdiction accepts a fax as a valid
contract, then the time lag is irrelevant.  If it does not, then there is a
chance that if a party were to somehow repudiate a contract effectively
before the signed original arrived, that may be effective to get that
person out of the contract.  However, if the other party were to rely on
the faxed document, there are other equitable doctrines that might come
into play to protect that party for any harm that might result from relying
on the fax.  Although some states have consumer protection laws for certain
products that permit the
buyer to rescind the contract (even an original, signed one)  for a certain
number of days after purchase, I doubt that such laws would apply to
contracts between large commerical and academic institutions, which are
presumed to have access to competent counsel.  

You ask a simple question, and this is what you get.  Lawyers!

Very truly yours, 

Rodney L. Stenlake
655 Orange Street, Unit 5
New Haven, Connecticut 06511
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